In the fourth installment of The Future of Canadian Optometry series, Dr. Harbir Sian speaks with Mr. Rick Gadd, President of Essilor Canada. They talk about the fair amount and types of disruptions in the industry and the positive aspects they brought on.
Going deeper, in this episode, Mr. Gadd discusses:
· What he believes makes Canada a desirable market for private equity and foreign companies
· What parallels he sees in Canada compared to the US market
· The Essilor (the largest player in the industry) is doing to support optometry
· How Essilor dealt with the conflict after acquiring Contacts
· What is his organization doing to support optometry
Aequus Pharmaceuticals presents the Future of Canadian Optometry series. Stay tuned for all six interviews with guests from different large organizations within Canadian eye care.
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Listen to the podcast here
Essilor Canada President, Rick Gadd - The Future Of Canadian Optometry
If you have been following along with this conversation about the future of Canadian optometry, then you know that these are conversations that I’m having and interviews that I’m conducting with leaders from various organizations within optometry in Canada and some of the larger organizations, FYidoctors, Eyeris, LensCrafters, and Specsavers, being one of the hot topics these days here in Canada.
The goal is to ask these leaders the questions that we would like to ask as optometrists, "What is your organization doing to support the profession? What is your organization seeing as the future of optometry in Canada? What do you as an individual see as the future of optometry in Canada?" Thankfully most of the guests have been very candid, including this episode's guest in the fourth installment of The Future of Optometry in Canada, Mr. Rick Gadd, President of Essilor Canada.
Rick being candid and open, does share a lot of insights from his perspective as the head of this gigantic organization. He has overseen so many changes within the industry, including one of the biggest pain points for us in Canada, especially in BC, the acquisition of Clearly contacts many years ago. He was very gracious in facing these questions head-on and giving the best answers that he could.
Again, looking at this from now a different perspective than some of the other interviews. For example, businesses like FYidoctors, Eyeris, and LensCrafters have storefronts and conduct business-to-consumer transactions. Rick is talking about the business-to-business transactions that he is in charge of on a day-to-day basis. He's bringing insights from his extensive experience working in the US and seeing consolidation, private equity, and foreign organizations entering the market.
What he sees in Canada as potentially similar experiences or parallels that are going on. Don't forget to share that we are having this conversation about The Future of Canadian Optometry with all of our colleagues across the country, take a screenshot, if you are on Instagram, throw it up on your Story. If you are on LinkedIn, put a link up there.
If you are not on social media, send a text message to a friend with a link to the episode or to YouTube, where you can watch these interviews in full but make sure we are spreading the word and helping our colleagues to be enlightened about this conversation and the important changes that are happening and coming for our profession in the future. Again, this episode is the fourth installment of The Future of Canadian Optometry series presented by Aequus Pharma with Mr. Rick Gadd, President of Essilor Canada. I hope you love it.
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Mr. Rick Gadd, thank you so much for taking the time to join me here on the show for this very important series of discussions on The Future of Canadian Optometry. Thanks so much for being here.
Harbir, thank you so much for having me. It's a pleasure.
A couple of months back, I put a call out on show or an invitation to various organizations that have a small or large footprint here in Canada in the optometry industry and the profession. Thankfully, people like yourself have stepped forward to answer that call and come forward and share their perspectives on where our profession's heading and what's happening now.
Since I put that invitation out there a couple of months back, I have been speaking to a lot of my colleagues across the country, Coast to Coast, in all sorts of different modalities to try to understand what are their concerns and thoughts about where we are now, and taking that national temperature of the profession. I don't like using the word average but I mean our mainstream middle-of-the-bell curve optometrists and colleagues, people who are doing their day-to-day work in their clinics.
The perspective that you bring and many of the other guests that I've brought on for this conversation is a very different perspective. You are the leader or the head of one of the large, if not, maybe the largest or one of the Goliaths in the industry here as President of EssilorLuxottica Canada. I would love for you to share as much as you can candidly from that higher or a different perspective than most of us optometrists would have. The first question that I ask all the guests is this, from your perspective, how would you describe the current state of optometry in Canada?
I'm still learning about the Canadian industry, to be fair. I joined officially leading the EssilorLuxottica Canada organization at the end of March 2022. I've had the opportunity timely as there were so many meetings going on. Everybody was getting back together to meet and talk to a lot of key opinion leaders in the industry, customers that were serving, and the associations.
I would put it into a few buckets. First is that the health of the industry is quite strong in terms of demand. We have a strong need that continues to be extremely relevant in Canada and across the country. Secondly, I feel it's an under-penetrated market relative to some of the under-markets in the world. That, to me, states opportunity.
Penetration isn't just necessarily a number of people who are wearing contacts or eyeglasses but the breadth of being able to utilize visual enhancement for different needs, whether it's looking at a computer screen, being outdoors or for protective purposes, and so forth. I feel like there is an opportunity in terms of penetration.
The third dimension, though, which I knew of but it's become quite clear to me, is that it's a very attractive marketplace. In the sense that you, the Canadian market has attracted a lot of players. Probably the number of relatively large players who have entered the Canadian market is quite stunning relative to others. I will reference the US because it's an easy reference that there are some similarities in the market. The last players have entered Canada from international destinations.
To me, that says a couple of things. One is that the barriers to entry may be lessened a little bit for the Canadian market but secondly, the socioeconomic landscape and the opportunity to market are very attractive. I always remind all of my peers that Canada is the tenth largest GDP in the world. The only thing that goes against that, perhaps, is that we happen to live next door to the largest GDP in the world. Sometimes that gets muted a little bit.
Essilor Canada President: Optometry has lagged in other industries in terms of the utilization of technology to streamline business and business models to attract, engage, and retain patients and consumers.
The fundamentals of the industry are powerful. What I see is that it's a very dynamic marketplace as a result of there being so many entrants into the market. That creates a new sense of competitiveness in the marketplace. It also creates, potentially, both opportunities and risks for others that we will all have to change our approach to not just survive but thrive in this very dynamic market.
You touched on it a little bit. I’m curious because I've heard this now a lot as I have been having these conversations like in Canada. For some reason, the Canadian optical market or eye care market is very attractive, whether it’s private equity or foreign organizations. What is it about Canada in particular that you feel like somebody else would want?
To point out the elephant in the room here, a lot of these discussions that are happening now are Specsavers coming to Canada and making a big splash. For better or for worse, that's the way it is. I'm asking a question Specsavers as well, “Why is it that you have been eyeing Canada for so many years?” Rick, from your perspective and the few months, that you have been back in Canada, what is it that you think is creating that desirability?
It comes back to the structural things and some of the fundamental characteristics of the market itself. Canada is very stable politically. It's a wealthy country. Uniquely healthcare in Canada is very unique compared perhaps to other marketplaces. The awareness is there in terms of healthcare. I view vision care as part of healthcare in many dimensions. That's an area that creates attractiveness but there's something that's fundamental that there has been a premium-ness in the market. We see it in our own numbers.
When we measure, Canadians, by in large, tend to shop a little more premium. I'm going to get specific about spectacles and apparel brands, and so forth. Canada is very premium in terms of its desire to look and feel good in what they are wearing. That in itself is attractive to many entrants into the market. The last thing is that when all of us benchmark the penetration in the market, we see that there is opportunity in terms of not just share grab but in fact, growing the entire marketplace. We see the regularity in terms of eyewear purchases relative to some other markets. I feel like that that creates opportunities. There are a number of different dimensions there. Hopefully, I'm getting to the core of your question.
There's no specific direction or answer that I'm looking for. You have that unique perspective from your position, and I would like to hear from that. When I ask that question to other guests, they will give me their perspectives. You mentioned penetration a couple of times. Do you feel like there's a large portion of the population that's underserved?
When I look statistically, there are gaps in terms of access. Canada has incredible density disproportion around urban areas but there are a lot of rural areas that are not appropriately addressed. That has something to do with the penetration, the regularity of comprehensive eye exams, and so many different dimensions. We can tie that back to healthcare and access as an opportunity in the Canadian marketplace.
Even in the urban centers, there aren't as many triggers in terms of that annual comprehensive eye exam that may exist in some other markets. That leads to penetration and regularity of purchase also. Finally, there are still multi-pair opportunities I'm speaking about from the perspective of a spectacle lens company at its root. We see that in terms of performance and situational as well as fashion opportunities. People don't have as many pairs of glasses in Canada as they do in perhaps some other markets.
With various forces coming in, whether it's internally or from other countries, there has been a fair amount of disruption, generally speaking. I'm curious. In your mind, how would you describe disruption in our industry or what forms of disruption you've seen?
There is the obvious one, private equity entering the market, and through consolidation, that creates one level of disruption. When I speak about that, we can go back to when this was purely in the independent marketplace in the '90s when it was largely speaking. There were no chains to speak of. I will start with the point fundamentals of our industry as a whole. Whether you are in Canada or the US, many other markets are very attractive. Private equity identifies markets where they think that they can create efficiencies for the benefit of their shareholders or themselves. I'm probably stating the obvious but it's a very fragmented industry historically that's created some opportunities that have been ideal for that.
The industry's fundamentals are creating a new sense of competitiveness in the marketplace.
What it means practically as far as disruption is concerned is that there are always two sides to every coin. On the one hand, it elevates awareness. We see more communication and advertising. It's more organized in terms of communicating more from a commercial sense is 0.1. That can elevate awareness. That can be a positive as far as the disruption is concerned.
There is the other side of the coin for an independent optometrist with their own private practice. The level of competition or their ability to compete becomes a more challenging environment in some cases. That in itself is one level of disruption we are going through that we continue to experience. The second level of disruption is technology.
I feel like optometry has lagged, perhaps in other industries, in terms of the utilization of technology to streamline business and business models to attract, engage, and retain patients and consumers. That level of disruption is accelerating as well too. We could talk about Teleoptometry and what role it will play going forward as an example.
Certainly eCommerce, in terms of the engagement in our industry, but now, very much a percentage, and I don't know the exact percentage that eCommerce represents as far as purchases are concerned in Canada but in the US, it's roughly around 10% now of eyewear purchases. That's another level of technology disruption but it's also following the path of what consumers are seeking in terms of choice.
I will speak from a company that is largely anchored on innovation, the other level of disruption is that we've gone from correction to protection, and then prevention, now to therapeutic lenses. The scope of the practice has also gone in terms of disruption to more medically oriented and integrated. What I'm speaking about very specifically are myopia and myopia management through therapeutic lenses, whether it's contact lenses, drops or spectacle lenses. Those are areas of disruption, and disruption doesn't necessarily always mean a negative thing. It means how do we adjust to either capitalize on the opportunity or in terms of minimizing the risk?
The word disruption tends to have a negative connotation, generally speaking. An obvious question for you, though, does it have to be negative or positive forms of disruption? How do we see it? How do we make it so the disruption can be positive?
It can be an extremely positive one, competitive, in general, always challenges all of us to up our game. We need to continue to innovate, whether it's how we are attracting and retaining our patients, the patient journey in practice or we need to change our scope of practice through innovation. I'm going to deviate because it helps me a little bit to rationalize what we are going through from a reference point. When I was growing up, my dad was a veterinarian in Toronto who's now well-retired. He was in private practice his entire life.
Innovation back then was when Big Box like Petco and PetSmart, came on the scene, which was hugely disruptive for them. They had to reinvent their practice because what was a key source of seeing patients attracting patients was an annual vaccination of the dog or cat. They had to find new ways of bringing new services into the practice to continue to retain and attract new patients and patients that had high value.
My dad, at 58 years old, went back to dentistry school because dentistry was something that they felt in the practice could be valuable. There was a disruption. They decided to change the scope of practice. They educated themselves and went back out, which was very positive and additive to the practice. It's super relevant in terms of disruption. By the way, dental has become a very significant part of their practice. The margins were way better on dental than they were on doing vaccinations. Pet owners oriented themselves to where they needed to go for the service that they wanted. That's an example of a disruption that can end up in a positive outcome.
Often the concern is when there's disruption, it's the sky-is-falling mentality that this is going to be the end of the profession but often we end up, as you said, pivoting, evolving or however you want to phrase it and hopefully coming out better if we are doing the right thing. You have this perspective from the US, you can make some comparisons with our industry in particular.
Essilor Canada President: My job is to create not just a product and service platform around eyeglasses but also find ways that we can help our customers compete in the marketplace.
Private equity, as you mentioned, is a big force now in Canada but it's not new in the US. You've seen various large organizations formed through private equity. Overall, in your opinion, as much as you are comfortable sharing, has it been beneficial for the industry? Has it been negative? Has everything come to some equilibrium after a few years?
What has been positive is that it has challenged all participants in the industry to evaluate our business models and find ways of creating new value. We serve the entire market as EssilorLuxottica, which evaluates how we can create value for each one of our stakeholders that's going to be meaningful for them. It's hard for me to speak in terms of our competitors and so forth but from our perspective, what we see is that every single year the industry continues to grow, and that's a positive outcome.
Secondly, with these well-organized businesses that are private equity backed and there are many different players, everyone from small boutique private equity players to large ones like Goldman Sachs, as you well know, MyEyeDr is a great example. If Goldman Sachs finds our industry interesting, that says something or KKRs and others. There are some very substantial private equity institutions that find it interesting.
In the net effect, there have been those practices and doctors who have found that the timing was good for them to exit their practice and play a different role. It created an opportunity for them, and that's stating the obvious. There are also some other doctors who have found that they are more focused on the clinical aspect of their practice, and it's where they want to focus versus the soup to nuts truly independent practice where they are managing all aspects of the practice. That has certainly been an opportunity that has also been addressed and has made it attractive to some.
Bottom line is that it creates choice overall. I don't mean to be ambiguous in terms of saying, "This is good or bad," Overall, it's good. It's a natural evolution of business. We've seen it in other industries, look at dental and dermatology, you can go down the list of other professional services and solutions that private equity has been active in. What I see is that a greater awareness by patients and consumers, in general, is a very positive outcome.
Where has it been a negative? "I want to stay independent. I want to own my practice." In the end, is that they need to seek help partners to help them succeed in a much more competitive environment. That's a reality. "How do I distinguish myself when I've got this marketing, prowess, and presence in the market? How do I elevate my voice as an independent optometrist?" These are all things that have a negative potential outcome for an independent but at the same time, there are means and ways to reinforce them. It not only just survive but thrives through specialization and differentiation.
I should clarify for people who are reading in case I haven't already. In EssilorLuxottica, your position is not consumer-facing. The other guests I’ve had are the head of FYidoctors or whatever. They have their banner stores that readers are probably thinking of, and your position is a bit unique in the series of conversations because your entity that you are at the top of is dealing with the businesses themselves on that side or EssilorLuxottica.
You have a very different and broader perspective because you are working with private practices, the private equity type of organizations, and these other large players to clarify for everyone who has been reading this. Rick's position here is not the head of LensCrafters stores. It's the other side of the business.
Thank you for the clarification.
We've talked about this before, and you are keenly aware of our feelings here, especially in BC of Clearly contacts. Several years ago, there was this big disruption and big deregulation here. Clearly essentially, they infiltrated the government and had things change to their benefit, which ultimately, from my perspective, was to the detriment of the profession. Some years later, Essilor had acquired Clearly for a large sum of money. First, I want to ask you, from your understanding and experience. What was the Canadian sentiment towards Essilor at that time, and then a few years later, do you feel that's shifted, and what is it now?
The fundamentals of the optometry industry are attractive, and private equity identifies markets that can create efficiencies.
I will give you my perspective. I wasn't involved in the transaction but I was with Essilor of America at that time when the acquisition was done. A lot of people might say, "Why did you do it?" It was not EssilorLuxottica, and it was not Essilor that did the acquisition. They had no eCommerce strategy but as a whole, we saw eCommerce starting to elevate. It was an opportunity that was presented. That's the background behind it.
Honestly, as a company, we felt that we could be good stewards. We thought about, "Where else?" because it was clearer that Clearly was going to be sold. We felt that we could be good stewards of that acquisition. One can argue whether or not we have been but nonetheless, our intention was to acquire this to start to learn a very basic sense of eCommerce and determine what our role should be going forward. That's the background.
My perception is that Essilor was viewed quite commonly as a partner to the Independent Eye Care Professionals. I'm going to assume that because I wasn't in the Canadian market at that time but I knew what our reputation in the US has been and continues to be as a partner for Independent Eye Care Professionals. I don't know that there was a reaction to the acquisition and that it was not necessarily a positive one.
There were some mistakes made along the way. One is that we should have clarified what were our intentions. There were commitments that were made around how we would behave in the marketplace, and certainly, that was our intention to do so. As I look forward, here's what I see, eCommerce is a reality. Our customers understand that it is part of the business model in the marketplace. Do they think that we should be participating? You will get as many answers as you will have from individuals who are in the industry. Some continue to find that unacceptable.
My response is that we have several lines of business. We are competing with our customers in eCommerce and own LensCrafters, that's another example. What we have tried to do is provide choice at the end of the day. My job is to create not just a product and service platform around eyeglasses but, in fact, to find ways that we can help our customers compete in the marketplace. That's what our intention is to do. We want to elevate the entire industry but also recognize that consumers will exercise choice as a vertically integrated player but as a single player.
Another thing about EssilorLuxottica, we don't have any other business. We are wholly into optical. If we are not successful in this business, then frankly, we don't have a plan B. We are in optical, and that's all there is to it. I've talked to people, including yourself. You started by saying we've had this conversation, and that's a point of stress in the relationship. We communicate regularly back and tell them, "Here are the things that are concerning to our customers very specifically." We try and act as good stewards to create that connection.
I, in fact, went to the president of Clearly and said, "Here are some concerns that we need to try and work through." If I can say anything, that's an open line of communication, and we are vested. We have to balance all of our business needs. It's an important and material conversation to have that, so we have a voice.
The second thing is that it's on me, my team, and my company to create value that's incremental to being a transactional relationship that we need to elevate and help you succeed in the marketplace. The second comment is that we work very hard on doing that, not just through the products and innovation that we provide in terms of the actual material itself but in the way we support the practices through marketing platforms, driving traffic to the practice, and so forth. Do I wish that everybody would love us? I absolutely do. It's probably my nature.
It bothers me when people have concerns about me but again, in a very pragmatic way, I take the feedback and try and direct it in a positive way that moves our business forward. I ask to be judged. The final point is that I feel that's a point of judgment and fair enough, then judge all of our competitors in the same way. We all have relationships in the industry. Some of us own certain assets that may be more obvious. At the end of the day, I would ask only that your readers judge us in terms of the value that we create. It's a very personal choice, and I completely respect that.
First of all, I'm humbled that after our conversation, you felt compelled to speak. I've seen that whole scenario play out from my own biased perspective of an independent practice optometrist or an optometrist based here in BC. The timing was very unique for me. I graduated in 2010, and as I was coming out to practice, that's when all of that disruption happened. It was very plain for me to see when it happened but over time, I've realized now, as we are talking, that there's the other aspect of your customers, as you've referred to a few times are optometrists and other eyecare professionals.
Essilor Canada President: What a patient recognizes as the quality of care is the interaction with the doctor and the staff. The comprehensiveness of the engagement, the utilization of the technology, and the instrumentation lead to a positive experience.
From that perspective, the acquisition of an eCommerce player, which is technically my competition, does seem like there's a conflict there. I can see how that would be difficult for people to reconcile it. It's a business decision. At the end of the day, you are running a business. It’s fine. There seems to be a conflict there. You are serving practice practitioners like myself, and at the same time, you own what seems to be my competition. How do you reconcile that, then?
A few things, one is that I reconcile it by trying to create value every single day to earn your business and to help you succeed in the marketplace. My sole motivation is to be a good partner to you. Secondly, as far as our participation in the market and, as I stated, we are a vertically integrated player in the market. We have been for a very long time. That is part of how we create value in the marketplace. Thirdly, we cannot ignore that consumers will make choices about how they want to purchase eyewear and contact lenses.
Clearly is a very big player in the context of contact lenses in Canada. In the sense that they are a relatively small player, and I don't mean to take anything away from Clearly or their success. It's just that there are multiple entities that are participating here because consumers, ultimately, are looking for choices. We feel that we need to be there for them at several different junctures. I will leave you with one thing. There are certain things that we will not compromise. If you look at any of our entities and our consumer or patient-facing, the one thing that's so foundational to us is that a comprehensive eye exam is what we stand for.
From a clinical perspective, reusing an old prescription and things of that nature are completely out of balance. We are committed to a comprehensive eye exam, not only refraction. It's the cornerstone of healthcare and something that we feel is very powerful and differentiating in optometry. It's a critical role that optometry plays in the entire healthcare system, not only in terms of eyecare but in disease states that are identified. It's fundamental to the company. It's not just me.
There are other players who are less concerned in the industry that may have eCommerce platforms that are less concerned about the starting point of a comprehensive eye exam, which is important. As we reinforce that, it is an opportunity to engage that customer or patient in your practice, wherever they may be. In the end, it's a balance, and I fully recognize that but we work very hard to keep the fundamentals front and center.
Speaking of comprehensive eye exams, in your opinion, what factors are involved in a patient's perceived value of the eye exam service? Before they walk into a clinic or after they leave it, what do you think helps a patient decide whether they received good value for the service they had?
The patient journey, in general, is differentiated in many different practices, retail locations, etc. The quality of care is the starting point. For all of us, it's the quality of care and the sense of quality in terms of that journey from the time that they enter the practice until the time they exit the practice. There's a high degree of variability that exists now but what a patient recognizes as the quality of care is the interaction with the doctor, staff, and the comprehensiveness, in terms of the engagement and the utilization of the technology and the instrumentation that leads to a very positive experience or not a positive experience.
Coming out with a diagnosis and a plan for their vision is how value is created on behalf of the patient, and ultimately, it's the patient's choice whether or not they act upon that like any aspect of healthcare. The additive there is that linking the conclusion of the comprehensive eye exam that is very clinically focused and then translating that into, "Here are my recommendations in terms of how to enhance, protect, prevent, and correct, and then ultimately, enhance your life through this set of visual solutions for you."
What role do you think price plays on that perceived value?
I'm not so sure that I am qualified to answer a price question other than to say that if the price is too low, then the perception of value goes down. If the price is too high, then it feels like access is being challenged. What's the balance in there? I won't put a dollar figure on it for you because I don't have a dollar figure.
Multiple entities are participating because consumers are looking for choices. We need to be there for them at several different junctures.
That was going to be my next question. The question I ask every guess is, how much do you think a high-quality, comprehensive eye exam should cost? I understand it's a difficult question, and it's not simply about the number. It’s about the conversation that happens after the questions are asked. How much do you think it's worth?
You put me on the spot. It's $150 or $175 for the initial exam itself, and then there's an adjunct on that as well. As you identify in the pre-screening, there may be areas that you identify that there are incremental tests required that should be incremental in terms of the cost associated with it. That's why I say it's a little bit hard for me to put an actual dollar figure on it because it can range.
If somebody is young, their health is good, you are less likely to find a disease state. It can be a more efficient eye exam. It should be a comprehensive eye exam and imaging associated with it to conclude that there are no disease states that are happening or that there isn't something problematic. At the same time, for somebody my age, my visual needs have changed over the years but also things that have been identified along the way. I've felt powerful.
My optometrist identified that I have macular degeneration, and it was horrifying to me but I'm glad he caught it so that I can manage it. What’s that worth for me? That's worth a lot to me because I can manage the state in itself at its very early stage. It's almost like I put a value on that's incremental, and had I not had that high degree of imaging, that would not have been identified. Until it was an advanced disease state, and then it's much more difficult to manage as it is. Preaching to the choir, you know way more about this than I did.
You touched briefly on Teleoptometry. That's certainly something I would like to dig into a little bit. As far as the implementation of technology in optometry, Telehealth being one, do you see other forms of technology being implemented that will change the way we perform an eye exam?
Yes. From an instrumentation perspective, imaging is an area that has so many possibilities. It's gotten so much better. In general, managing disease states and expanding the scope of practice is something that's a real opportunity for optometry. When I think about technology in general, the ability then to also be able to transmit that data in a secure environment, those images that are high quality, high-definition to get timely expert opinions or real-time as opposed to having to wait for an expert entity to be able to evaluate an image. Those are very positive progressions in terms of our industry and the possibilities to be able to address issues in a much shorter timeframe with a great deal of efficiency and also access.
That's the other area for me that's important. It's not accessible in the sense of being able to get an eye exam but access to a small pool of experts that can then be able to aid the local practice in terms of evaluation, recommendation, and the next steps. It's creating a pool and a panel of doctors that are more connected. In a very connected world, that seemed to me to be a super powerful opportunity. That in itself is interesting.
The second part of that is accessed, though. We start out talking about rural communities and the ability to access optometrists and where in some communities where they don't exist. The reach by utilizing technology, Teleoptometry being the discussion point, is super powerful. It can be enhancing for the doctor and patient. It opens up new doors in terms of regularity and interaction but it cannot be compromised.
It falls back on a comprehensive eye exam. I'm using my iPhone as I talk to you but I do not see a foreseeable future where that can replace a comprehensive eye exam. That is simply ludicrous. There needs to be that interaction or evaluation and recommendation in terms of expertise that cannot be replaced.
It's a very rich topic and one that I find exciting. It's being evaluated by different associations, and different recommendations across the country in Canada, the AOA in the US is also taking a position, and the CAO is also collaborating in the North America perspective in sharing data and taking a position. I had a comprehensive eye exam completed in a pilot that was being run in the US. I'm a high-touch person, so I like to see a doctor or an optician. I did not feel that I walked away from that having a bad experience. In fact, it was a good experience but as you and I are talking, the doctor was there. They were live.
Essilor Canada President: Technologies are very positive progressions in our industry and offer possibilities to address issues in a much shorter timeframe with a great deal of efficiency and also access.
The most important part of the connectivity through all of this was the ability that the doctor was in control of in this scenario. They were doing the refraction, looking at my retinal images, pointing them out, and walking me through, "This is what we saw. This is our recommendation." It holds a lot of promise but again, it was a live doctor, and that was the power. If it were something where that interaction didn't occur, then I would've seen that it was low value, and perhaps I would not have trusted it as much.
There are a lot of potentials, and we are in an industry that's growing. Although there's a lot of competition and need for optometrists. How do you efficiently have the optometrist in places where they are needed? There are a lot of things that can be done here to enhance the practice and enhance it for the doctors as well as the patients.
In that scenario where you had that exam, foreseeably, when it is implemented somewhere, is it a technician that's conducting the tests, and there's a doctor who's watching?
It was a pre-screen where a technician did the pre-screen, the way that you would have one of your staff members doing a pre-screen. I then went into the exam room. There was a technician in the room. The doctor was on the screen, and I was looking at the doctor in front of me but the doctor was remotely controlling the equipment. It wasn't the technician that was operating the equipment. They weren't saying to the technician to make adjustments. They were able to control it. That's what I found very reassuring.
Was the retinal evaluation primarily done with the photograph or digital imaging? Was there any form of lifetime active viewing?
There was lifetime active viewing.
As you stated already, our industry tends to be quite slow to move on to technology, generally speaking, Even if you won't agree with that. I will say that very bluntly when I do lectures on eCommerce and stuff like that, and we are slow to move on a lot of stuff. When technology like this comes around, where it potentially can improve and allow greater access to care, it still seems a little scary. There will still be some form amount of pushback, as I imagine you would expect.
For a couple of reasons, one is the potential loss of the accuracy or technical ability to diagnose. I know you will say technology is very good and it catches everything fantastic but the second one is the bigger one, as artificial intelligence plays a big role already in healthcare. There's a concern that "You got all the technology. You implement the little AI, then where does the optometrist come in on this?" Do you think that's something that we have to worry about?
It's something that healthcare needs to be cautious of. I use healthcare as opposed to eyecare because, at every intersection, there is always a risk of somebody who says, "AI can take care of everything." The training has certainly continued to be enhanced through the optometry schools. There's always a risk but that's the important role that the industry holds as a whole. The associations need to stand up for the right things when they are interfacing with governmental institutions so that the government understands exactly what they are speaking about and what the recommendation is and what are the risks associated with it.
That's where each one of the provincial associations of optometry or the Canadian Association of Optometry, that's the thing that they need to speak loudly and well-educated on. It can't be perceived as a fear of loss of revenue. It is about the sanctity and the importance of the comprehensive and the quality of the eye exam to make sure that it’s not compromised. As long as we are clear in what our commitments are and what could potentially be at risk. It has got to be fact-based as well, too. AI has a role to play, to be super clear but AI isn't replacing the optometrist. It enhances what the optometrist can do on behalf of the patient for the patient.
Optometry is very largely sustainable in terms of demand. We need more optometrists so long as we don't dilute the caliber of optometrists graduating.
As you may know, there are various incentives being thrown around, whether it's high salaries, signing bonuses or forgivable loans, to help attract these young doctors. Initially, I thought that was fantastic. I'm putting this out there as my thoughts, and I would love for you to share what you think of it. It's not exactly phrased as a question.
My thought was, "Is the young optometrist the person with the leverage and the power in this situation or do organizations know that the money will help draw them in a certain direction, and it may end up clouding their decision?" This may affect the trajectory of their career if they end up in a position where a few years from now, they are not so happy, not fulfilled or not doing something that's helping to help the profession grow. I had that conflicting thought in my own mind.
We see this not just in optometry but we know that their employment is not what it was. There's high demand and signing bonuses going on in multiple industries with different people with different backgrounds and so forth. It's not exclusive to optometry but it certainly amplified what we are seeing in terms of demand. What does that mean? I don't think it's a forever thing, to be quite honest with you. It's a now thing.
The sustainability behind those models gets pretty tough. We are not participating. I'm giving you a personal opinion. The long-term sustainability of that means that your cost structure goes up. How do you offset that? For the moment, there's a burst capacity need that's required by many others. How will that impact the graduates? I suppose it could influence them to maybe not sample the many options available to them. It may target them to stay within a certain model.
One of the things that I found interesting with some optometrists is that they've had different experiences throughout their life. They have been an independent private practice or associated with LensCrafters but still remained independent. They've worked in corporate. A guy that you and I both know, Dr. Howard Purcell at NECO, has done a lot of different things in optometry. He's the President of NECO. He was in private practice and an academic. Does that polarize someone to say, "I got to stay on this trajectory?" I don't know. Maybe it's possible.
I truly don't think this is a forever thing. It's like employment is in the world, in general, or certainly in North America. There's high demand for employment for certain capabilities. That is a competitive situation. Let me go back and see what I said. Optometry is very largely sustainable in terms of demand. We need to have more optometrists as long as we don't dilute the caliber of optometrists graduating because eyecare and healthcare still have so much potential. There will continue to be a strong demand there. We need to solve the demand side of the equation as far as people are concerned.
The last but very important question. The core of this whole series of discussions, when I put that initial invitation or call out is that you are throwing money out there to optometrists or doing certain things to help individual optometrists gain employment and to be financially secure. Ultimately, the question is, what is your organization doing to help support the growth and the strength of the profession of optometry in the long-term?
Thank you for the opportunity to state that. I feel very strongly about this. We are a company that is built on innovation. I joined Essilor in 2011, and one of the things that struck me was the depth of innovation that it created, and it was the same thing I felt about Luxottica in terms of innovation. Why is innovation important? It will perpetuate the industry. I didn't come from an optical background, so it was hard for me to imagine that eyeglasses that had been around for hundreds of years could have innovation associated with them.
Experiencing the continuous progression in terms of the technology, the designs, AR codings, and the fashion component of what we do. We have inspirational brands that make people feel good. They want to be associated with something that's very unique and special to them, whether it's Oakley or Ray-Ban. We have 30 different brands that we represent. Up and down the value scales as well too, from Prada, Vogue, Costa, and I could go on and on.
What we try and do is, first of all, create that consumer desire for great brands. When they enter into the practice, we want to make sure that they have a choice. We are known for Varilux, Crizal, and Transitions as key brands, and we are very proud of them but we serve the entire market at every price point in terms of lens technology. We constantly press on innovation. Our investments in myopia or presbyopia are continuing to find ways of developing therapeutic solutions, and that's all built on innovation.
Essilor Canada President: The sanctity and importance of the comprehensive eye exam and the quality of the eye exam are what the Canadian Association of Optometry should be speaking about loudly to ensure it's not compromised.
I was always proud to say that we spend between 3% and 4% of our top line as a company back on innovation every single year from an R&D perspective. That's huge. That's more than all of our competitors combined. We are committed deeply to innovation but it's not innovation based on product. That's what we are known for but it's innovation. I talked about having innovative solutions for practices to help them succeed in the marketplace, whether it's an integrated supply chain. This stars program that looks Luxottica or an EL 360 program that we've developed to help not only in terms of driving a good outcome with the patients in the dispensary but also offering incremental value to the practice to find ways that we can help them succeed again in the market.
That's where innovation is at the core of what we do. That's how we add value. Finally, we have to. That's at our roots. Our partnership with Meta on Ray-Ban's stories is the tip of the iceberg. That will be another wave of innovation that will come into the industry. We are deeply committed. How do we bring that to life? It's not like we are the first people who've integrated something into eyewear but what we've done is that Meta and ourselves have chosen each other as partners on this journey. A two very powerful brands with ecosystems. We are inviting everyone because we are an open network.
My closing comment is that while we show up in many different ways, we are an open network. Leonardo is a learning platform, which we are extremely excited about. It's open to all. We are trying to play our role, as you stated very accurately. We are one of the largest players in the industry that comes with responsibility. The responsibility for us is to give vision a louder voice, elevate the industry in ways that we can, create a demand, and constantly innovate so that we can progress the industry and create value for everyone.
That's how we try and do it and say it humbly. From the CEO's office and down, that's what drives us every day as they see more, be more, and live life to its fullest. It's generally our North Star. I am personally excited to be on the journey. I'm sure happy that in 2011, I made a decision to join the optical industry because it's an amazing industry, and I love being a part of it.
Thank you so much, Rick. Thanks so much for being here for answering the questions, even some of the more challenging ones, and being open to having that discussion. I appreciate you being on this.
It's my pleasure. Again, thank you for having me, Harbir.
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There it was. That was the fourth installment of The Future of Canadian Optometry series presented by Aequus Pharma. That interview was with Mr. Rick Gadd, President of Essilor Canada. As I mentioned in the intro, I'm sure you took a lot of insight away from that. Rick brings incredible insight with so much experience in the industry from the US to Canada. I felt like I took a lot of information there that I can use to have conversations with our colleagues and hopefully help guide our profession in the right direction, collaboratively altogether.
Don't forget we are having these conversation with six episodes or installments of this The Future of Canadian Optometry series. This one was the fourth. We have two more interviews to go. At the fifth installment is with Mr. Alfonso Cerullo, who is the President of LensCrafters in North America. The sixth then final installment is a great interview with Dr. Kerry Salsberg, who is an independent practitioner and optometrist, to talk about how we can, as independent and associate ODs, be successful and help to guide our profession in the right direction. Make sure you stay tuned.
Don't forget to share this on Instagram, LinkedIn, Facebook, wherever you live, and spend your time. Call a friend and let them know that this conversation's happening. As always, I'm very open to your feedback. I would love to hear what your thoughts are so we can continue to have these conversations and hopefully have bigger and better conversations over time here on the show. I will see you in the next episode.
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About Rick Gadd
Rick Gadd is President of Essilor North America and responsible for the company’s overall vision and planning, including all aspects of the business, mission and culture. A proven leader and advocate for Essilor’s mission of improving lives by improving sight, he is passionate about the customer experience and is highly regarded for delivering results.
Rick joined Essilor of America in 2011 as Senior Vice President Key Accounts. Most recently, he was President, ECP Sales and Services, and was responsible for developing and leading best-in-class teams to accelerate sales growth and customer satisfaction through ECP partnership and unique product and service innovation.
Prior to joining Essilor, Rick was Vice President of Sales for Motorola’s Mobile Devices business where he managed the wireless carrier relationship, demand generation and revenue growth for Motorola in Canada and the USA. He has more than 20 years of high-tech sales, marketing, product management and business development experience. Rick obtained his bachelor’s degree and his BBA in marketing and finance from York University in Toronto, Canada.
“I’m proud of Essilor’s commitment to our customers to provide innovative products and innovative business solutions. Innovation is our catalyst for growth.”